Case Study: Follow-up to a Hotline Complaint

Situation:

The Compliance Officer at a large healthcare system received an anonymous tip complaining that two billers were changing ICD-9-CM diagnosis codes on Medicare outpatient claims in order to bypass Medicare’s Local Medical Review Policy (LMRP) edits. The tipster also informed the Compliance Officer that other billers and staff were aware of this practice and one individual laughingly suggested filing a “qui tam” suit. The Compliance Officer contacted QMCG auditors and asked for an impartial investigation of the complaint.

QMCG Proposal:

• Determine the current process for assigning ICD-9-CM diagnosis codes.
• Determine the current process for handling claims, which fail LMRP edits.
• Determine if there is an “audit trail” available to check a diagnosis against the physician’s documentation, the initial code assigned and the code at claim release.
• Perform a focused audit on accounts, which have been identified as containing a differing diagnosis anywhere in the billing system.
• Interview government billers and Health Information Management (HIM) staff involved in diagnosis coding of outpatient services.

Conclusions:

Two individuals were altering the fourth and fifth digits of the ICD-9-CM diagnosis codes on failed LMRP accounts; allowing the services to clear the LMRP edits. These individuals were straightforward and admitted what they were doing stating that changing the fourth and fifth digits did not change the diagnosis by much. Releasing their claims kept their production up. Forwarding the account to HIM for follow up “took too much time”.

Recommendations:

• Return any overpayments to Medicare.
• Re-educate billing staff to the importance of physician documentation supporting the ICD-9-CM diagnosis code.
• Review the processes for obtaining the ICD-9-CM diagnosis for application to the claim to see if the process could be streamlined.
• Monthly audits to monitor that ICD-9-CM diagnosis codes are supported by physician documentation.
• Review policies and procedures related to coding practices.

Outcome:

• No further changes in diagnosis codes were found without physician documentation.
• Billing staff stated they were appreciative that their concerns were taken seriously.
• No qui tam suit has been filed.